THE ports of Los Angeles and Long Beach, are losing market share to rivals in Mexico, Canada as well as to Gulf and US east coast ports, reports the Los Angeles Times.
To reverse this, the ports are "aggressively advertising and giving customers discounts," launching ad campaigns in trade publications to promote their efficiency, the presence of two national railroads, the huge local market and its warehouse and distribution networks.
The Port of Los Angeles is also offering customers fee and rent reductions amounting to nearly US$26 million.
These actions follow a disappointing 2009 when the two handled 2.5 million fewer containers than in the year before for a total of 11.7 million containers. By comparison, Los Angeles and Long Beach in 2006 handled a record high of 15.8 million containers followed by 15.7 million containers in 2007 amid booming trade with Asia, after having more than doubled box volumes since 1998.
"The days of Los Angeles and Long Beach being the one big river for trade, with just trickles for everyone else, are over," Asaf Ashar, a professor at the National Ports and Waterways Institute in Washington, was quoted as saying. "Now you have as many as seven contenders vying for the same business, and each one of them has very big plans."
Back in 2000, the competitive environment was very different. "Five of the world's 10 busiest ports were in the US and Europe. Los Angeles and Long Beach ranked seventh and eighth, respectively," the report said.
"Now seven of the world's busiest ports are in China while Los Angeles and Long Beach only rank 16th and 17th. The change reflects not only China's emergence as the dominant manufacturing economy, but also the way US retailers and the shipping lines that carry their products are spreading their business around," it said.
According to independent economist John Husing, retailers have diversified the ports they use to include ports in Canada, the Gulf Coast and US east coast, and in particular, the ports of Vancouver, Houston and Savannah.
"It may cost a little bit more, and it may be a little slower, but they feel more secure using a variety of ways of getting their cargo to customers rather than simply relying on Los Angeles and Long Beach," Mr Husing said.